November 2015 Vol. 70 No. 11

Washington Watch

Senate Hears About Inadequacy Of Gas Transmission Proposal

Don Santa showed increasing frustration with the Pipelines and Hazardous Materials Safety Administration’s (PHMSA) continued failure to move forward with important pipeline safety regulations. At Senate hearings on Sept. 29, the INGAA chief said that gas transmission pipelines are hesitant to make extensive safety investments now since those investments could be proven inadequate or wrong-headed once PHMSA finally publishes an upcoming safety rule containing numerous changes dictated by the 2011 Pipeline Safety, Regulatory Certainty and Job Creation Act. The final rule isn’t expected for two years, although a proposed rule is apparently imminent. The key components of that proposed rule, according to Santa, will be a presumed expansion of the 2004-vintage integrity management program beyond High Consequence Areas and new testing requirements on pipelines built before 1970.

A broad proposed rule on those and other issues has apparently been approved by the White House Office of Management and Budget. However, it is a proposed rule and any changes to pipeline safety programs won’t go into effect for a few years at minimum.

“The practical consequence of this delay, however, is to erode the confidence of some pipeline companies that their voluntary safety commitments will be consistent with the final rules adopted by PHMSA,” stated Santa. If the proposed rule on liquid pipeline safety published by PHMSA on Oct. 1 (see item below) is any guideline, the proposed gas transmission rule is likely to impose much tougher federal safety requirements than are currently in force.

Congress could complicate this timing issue further. The House and Senate are considering changes to the 2011 law and pipeline safety laws more broadly. Theoretically, PHMSA could propose safety changes in response to the 2011 edicts, transmission companies could move integrity programs in that direction before a final rule is proposed, and then Congress could make further changes, necessitating a new PHMSA rulemaking.

The House and Senate have begun to work on a pipeline law reauthorization, albeit slowly. Sen. Debbie Fischer’s (R-MI) Surface Transportation and Merchant Marine Infrastructure, Safety and Security Subcommittee held the latest set of hearing Sept. 29. Frederick Hill, a spokesman for Fischer, said, “I have no timetable to share with regard to a reauthorization bill.”

At the September hearing, Christopher Hunt, chairman of the National Safety Transportation Board, said, “There is clearly significant room for improvement” in PHMSA’s rules regulating natural gas pipelines. Hunt mentioned a study the NTSB published earlier this year called Integrity Management of Gas Transmission Pipelines in High Consequence Areas. It found that, although PHMSA’s gas IM requirements have kept the rate of corrosion failures and material failures of pipe or welds low, no evidence exists to show that the overall occurrence of gas transmission pipeline incidents in HCA pipelines has declined.

Susan A. Fleming, director, Physical Infrastructure Issues, Government Accountability Office, reiterated criticism the GAO first made in 2013 that PHMSA transmission integrity program requirements are “not fully consistent with risk-management practices, which are the basis for PHMSA’s integrity management program.”

PHMSA Proposes Liquid Pipeline Safety Changes

Striking a blow for equal treatment, PHMSA proposed a rule for liquid pipelines on Oct. 1 just as it was planning to get out the parallel gas transmission rule. The proposal would require liquid pipelines to ramp up their safety programs in a number of areas including leak detection and repair of pipeline anomalies. The American Petroleum Institute (API) released a somewhat ambiguous statement in response to the proposed rule.

“Safety is our top priority,” said Robin Rorick, API Midstream Group Director. “We are always looking for new ways to enhance an already safe industry. We need a practical pipeline safety rule for hazardous liquids that will complement industry’s strong safety standards. We look forward to working with PHMSA when it comes to protecting the public.” She didn’t comment on whether she considered the PHMSA changes “practical.”

In February 2011, after PHMSA issued an advance notice of proposed rulemaking, the API and the Association of Oil Pipe Lines sent in a comment that said, in part:

“However, to the extent there is any need to modify PHMSA’s regulations; we submit there is no support for wholesale changes. API and AOPL also believe that many of the topics being considered in the ANPRM do not warrant the issuance of a formal rulemaking.” Rorick did not respond to a question asking whether the new proposed rule included any “wholesale changes.”

The proposed rule appears to anticipate some fairly significant changes. It would modify the integrity management criteria, both by expanding the list of conditions that require immediate remediation and consolidating the timeframes for remediating all other conditions, and apply those same criteria to pipelines that are not subject to the IM requirements, with an adjusted schedule for performing non-immediate repairs. There would be a new requirement for use of in-line inspection tools applied to any pipeline that could affect a high consequence area. That pipeline would have to be capable of accommodating these devices within 20 years, unless its basic construction will not permit that accommodation.

Industry Unhappy With Proposed Rule On Notification And Operator Qualification

One proposed rule PHMSA issued last summer has already produced a cascade of industry criticism. Also stemming from the 2011 pipeline safety act, the proposed rule extends current operator qualification standards to construction workers on pipeline projects and establishes a specific time limit for telephonic or electronic reporting of pipeline accidents and incidents. The proposed rule mandates
reporting “not later than one hour following the time of such confirmed discovery.” A pipeline would have to revise or confirm that initial notification within 48 hours of confirmed discovery of the accident or incident.

In comments submitted to PHMSA, INGAA asked the agency to limit incident reporting to “confirmed discoveries,” per the congressional language in the 2011 pipeline safety act. In the proposed rule, the agency appeared to expand the congressional criterion by defining confirmed discovery as one where “there is sufficient information to determine that a reportable event may have occurred even
if an evaluation has not been

“However, the definition attempted here appears to contradict that definition by adding the word ‘may,’ “ argued Eric J. Amundsen, vice president, Technical Services, Energy Transfer Partners.” Understanding of plain English usage would not hold that discovery has been confirmed if it is believed that an event may have occurred.”

INGAA also contested the definition of a “reportable incident” and that not all of them can be reported in one-hour. PHMSA should distinguish between a significant and non-significant event, the latter being one based only on account of property damage estimates, where there is no fatality or injury resulting in hospitalization.

INGAA supported PHMSA’s inclusion of construction and emergency response tasks in the operator qualification (OQ) requirements but countered the agency’s estimate of what the expansion would cost industry. PHMSA stated that the cost of the entire rule would amount to $3.1 million. INGAA believes costs involved to comply with changes proposed to operator qualification for new construction alone could easily exceed $322 million.

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